Vodafone Idea and Bharti Airtel are getting increasingly jittery about sourcing equipment from Huawei as the US tightens restrictions on the Chinese vendor, which may, over time, impact Huawei’s Indian supplies.
The two telcos, though, have enough supplies to last another six-to-nine months for their respective networks in India, even if supplies from Huawei dry up.
“Itis certainly a worrying situation. In telecom gear, there are thousands of components and one has to be cautious about what part will be impacted as these times will put telecom gear into difficulties,” a senior Vodafone Idea executive told ET on the condition of anonymity. “We don’t know where it will stop as it is just a start”.
The latest flashpoint comes with Taiwanese Semiconductor Manufacturing Co (TSMC), the world’s largest contract semiconductor maker, reportedly stopping new orders from Huawei Technologies to comply with US export controls. This could hurt Huawei’s manufacturing and supply of telecom equipment globally, including to Indian vendors, given that the Chinese company relies on TSMC for a critical chip for its gear.
The US alleges China uses Huawei to snoop on other countries, charges that Beijing and the equipment maker have strongly rejected. Analysts and market watchers say Huawei can’t really build telecom infrastructure without TSMC as a foundry since there are no visible alternatives.
“Everybody in India is aware of and watching the situation. We will have a plan B and C for sure. It won’t structurally impact the telco industry as it will surely be carrying out a plan B, if the situation arises,” the Vodafone Idea executive said.
Washington recently imposed fresh restrictions on Huawei’s ability to use American technology and the Chinese company’s India unit and other foreign subsidiaries in its export control entity list.
A Huawei executive, who didn’t wish to be named, downplayed its impact in India. “Neither does the Indian entity export nor import. So, there’s no impact as such on putting the India subsidiary into US’ export control entity list”.
Randeep Sekhon, chief technology officer at Bharti Airtel, told ET that issue was more geopolitical and affects all industries, but that alterative suppliers are available, if needed.
News Source: Economic Times